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The Government has made various changes under Income-tax Act wef 01.04.2019 by Finance Act 2019:

The amount of tax rebate under Section 87A has been increased from Rs. 2,500 to Rs. 12,500. Further, it shall be available to a resident individual whose total income does not exceed Rs. 5,00,000.

The limit of standard deduction for the salaried class taxpayers has been increased from Rs. 40,000 to Rs. 50,000.

According to the protocol with Mauritius & Singapore signed in May 2016, India has obtained the right to tax capital gains on the sale of shares in an Indian company. This right is only for investments made on or after 1 April 2017, meaning that investments made earlier are protected. Furthermore, tax on capital gains arising during the transition period 1 April 2017 to 31 March 2019 will be limited to 50% of India’s tax rate. Such shares, once sold on or after 1 April 2019, will be taxed at 100% of the Indian tax rate.

Section 194A has been amended to increase the threshold limit from Rs. 10,000 to Rs. 40,000 for deduction of tax at source on interest income, other than interest on securities, paid by a banking company, co-operative society or a post office.

The threshold limit for deduction of tax at source under section 194-I of Income Tax Act on rental income has been increased from Rs. 1,80,000 to Rs. 2,40,000.

Section 23 of Income Tax Act has been amended with effect from 1st April 2019 to provide relief to the taxpayers by allowing them an option to claim nil annual value in respect of any two houses declared as self-occupied. There is no change in aggregate limit for deduction in respect of interest on housing loan. The aggregate deduction for interest on housing loan for both houses cannot exceed Rs. 30000 in case of Repairs or Rs. 2,00,000 in case of construction.

Any long-term capital gains, which arises to an Individual or HUF, from the sale of a residential house property is exempted to the extent such capital gains are invested in another residential house property. Prior to 1st April 2019, the taxpayer was allowed to invest only in one residential house in India to claim exemption u/s 54 of Income Tax Act. After 1st April 2019, the exemption under section 54 is extended to two residential houses in India. However, this benefit shall be available where the amount of the capital gain does not exceed Rs Two crores. This option is available only once in a lifetime.


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June 2024